Optimistic on PCBs as multiple downstreams reach growth inflection point

We initiate coverage on Shennan Circuits, WUS Printed Circuit, and SYTech with Buy ratings due to upsides from 5G deployment and cloud adoption boosting the growth of demand for telecom and data communication (datacom) printed circuit boards (PCBs). We believe current expectations and share prices largely reflect the uncertainties in telecommunications demand. We expect PCB content to increase in base stations (BTS), smartphones, automobiles and internet data centres (IDCs). In Nicolas Gaudois' Q-series, he outlined UBS's expectations on 5G driving smartphone demand. Longer term, we expect 5G applications on new connected devices to further drive demand as infrastructure completes and 5G-enabled solutions mature. We estimate our covered companies' PCB revenue to deliver a 20% CAGR in 2021E-24E.